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Canara Bank Ltd
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Good afternoon, all. On behalf of Antique Stock Broking, we welcome you all to Q4 FY '24 Post-earnings Conference Call of Canara Bank.
From the management team, we have Sri K. Satyanarayana Raju, MD and CEO sir; Sri Debashish Mukherjee, Executive Director; Sri Ashok Chandra, Executive Director; Sri Hardeep Singh Ahluwalia, Executive Director; and Sri Bhavendra Kumar, Executive Director.
Without further ado, I hand over the call to MD sir for his opening remarks, post which we can open the floor for any questions. Thank you, sir, and over to you.
Good evening to all of you, sir. So I'm presenting here before that some few highlights of the just concluded fourth quarter of the financial year '23-'24. So our global business has touched all-time high of INR 22.73 lakh crores with a year-on-year growth rate of 11.31%. Our global advances have grown at 11.34%, stood at INR 9.61 lakh crores. Our global deposits have grown at 11.29% year-on-year growth rate of that's 11.29% and stood at 13.12%.
The deposits in the fourth quarter has grown considerably. As we shared with you during the announcement of the third quarter results that we focus this quarter more on that liability side to see that our incremental credit growth in the financial -- incremental CD ratio in the current financial year will be well within the 100%, which we could achieve it. That has helped us in controlling our cost of deposit as well as in the improvement of our CASA percentage.
Our net profit stood at INR 3,757 crores all-time high in the history of the bank at a year-on-year growth rate of 18.33%. With this, the Board has permitted us to propose the -- the Board has proposed a dividend of 161% of paid-up capital as against the last year, what we have paid the dividend of 120%. Our net interest income has increased to 11.18% year-on-year and stood at INR 9,580 crores and the return on asset has further improved to 1.01%, and year-on-year improvement is 20 basis points.
Our PCR is improved to 89.10% with year-on-year improvement of 179 basis points. Our credit cost is again maintained below 1%, that is stood at 0.96% with an improvement of year-on-year 21 basis points. The gross NPA stood at 4.23% year-on-year, a decline of 112 basis points. Our net NPA stood at 1.27%, year-on-year decline of 46 basis points.
This, whatever the 11.34% of advances what we announced is led by our RAM sector grown at 13.52% and stood at INR 541,489 crores out of INR 9,60,000 crores. And this led by retail credit at 11.68%. Agriculture and allied activities have grown at 18.69% and the housing loan grown at 10.81% and vehicle loan grown at 14.03%. Our year-on-year earnings per share has improved 37.26%, stood at INR 80.23 compared to last year, earnings per share is at INR 58.
So now that net interest margin last year, total cumulative last entire financial year, previous financial year, NIM was 2.95% as against the current year NIM cumulative is at 3.05% with an incremental improvement of 10 basis points, which is also as one of the remarkable performance I can say that under the present hardship conditions for the banking industry at a high interest rate regime of the liabilities. Even that liabilities at a rate of interest has been steeply increased, we could manage by managing our credit portfolio. That's the reason we could manage in the last fourth quarter, our quarter-on-quarter, the incremental growth in the yield on advances were 11 basis points versus the increase in the incremental interest expenses is 8 basis points. This, we could achieve it. That's why we could achieve [ 3% ]. But the fourth quarter itself, our NIM was 3.07%. This, we could attribute where we are already sharing earlier also 2, 3 quarters back that we have some INR 60,000 to INR 70,000 crores corporate exposure at much, much cheaper rate, which we lent 2 years back because to invest our surplus money, which we want to gradually reduce that exposure and to see that the stress on the margins to avoid that. That we are successful in the current quarter also.
We reduced our such exposure to some extent around INR 10,000 crores to INR 13,000 crores that has helped us in improving our NIMs and the yield on advances. And these are all the few ratios we are sharing. I think now it is open for you, if at all, if you want to ask. Because this presentation has been already shared with all of the investors as well as the -- and online also, our website also, it has been displayed. Now it is open for -- the forum is open for all the analysts. Whatever the clarifications or the queries you want to raise. And myself, along with me, all my 4 executive directors are with you now. It's now open for the forum for discussion, sir.
So the first question, we have from the line of Mahrukh Adajania.
So sir, I have a couple of questions. My first question is on your guidance. That relative to what you have achieved in FY '24 on credit growth, your credit growth guidance is slightly softer for next year, and everyone is quite bullish for the next few years, right? in terms of loan growth in retail and corporate. And then even on margins, your guidance of 290, that's like 17 basis points lower than the fourth quarter exit rate, right? So these are some questions on the guidance portion. And then I have a question on the new RBI draft circular, first your comments. And then companies like L&T Finance, REC have actually quantified the impact from the draft circular based on the initial estimates. Sir, if you could give any...
So let me clarify, madam, regarding that our guidance in the advances growth, generally, whenever we give guidance, we give conservatively only, but we want to outperform what we have given to that guidelines. Earlier also, we have given 10%. You see that we have grown 11.34% even after rejigging that pricing the corporate portfolio. And this year also, what we have given 10% is minimum growth, and we are sure that we will grow around 12% in the current financial year. But the guidelines always whenever, it's a practice of this bank for the last 3 years that we give little conservatively on the guidelines. But when it comes for the performance, we are outperforming in every quarter-on-quarter beyond that.
Even NIM also last time, you see that our NIM is 2.5%, the annual NIM. But the current year under such difficult conditions also, we are the only banker we could show the improvement in the NIM with 10 basis points. Our NIM has reached to -- the annual NIM is 3.05%. Of course, fourth quarter, it was 3.07%. The 2.9% is only guidelines given to you is a minimum, but we are sure that we will maintain at 2.95% to 3%. This is subject to presuming that the present tightness in the liquidity will continue throughout the year. If at all that liquidity eases once the elections are over, naturally, that will impact in our cost of deposit and automatically it will impact on improvement in the NIM.
This is a basic minimum based around the existing circumstances, we are giving it, madam. But we are definitely confident that we can perform. What we are doing is outperform in the last several quarters. The same -- it will continue in the next quarters also. We are not looking at any low traction in the credit, either in the RAM side or in the corporate side. Only that lower credit growth what we have shown is earlier because that 2 years back, we invested INR 60,000 to INR 70,000 crores when we have a surplus in our system. We invested at a very low price to some big organizations, which now presently is not feasible to continue at that price.
So hence, slowly whenever it is coming for the renewal, we are reducing our exposures to that borrowers. That is the reason it is looking at that it's a little lower growth rate in the advances side, but it's for all practical purposes. For the new sanctions and all, it is compared to last year. This year, new sanctions are much more than what the last year's sanctions. So growth will be there. Demand is there. But only thing because we are rejigging our balance sheet in the low pricing, we are making it to reasonable pricing because to maintain that margins, that it looks that it is a little lower side on the credit growth.
But now again, you are telling about the -- your second question is on what the RBI draft guidelines. Madam, RBI draft guidelines, it is still at a premature stage. It is only 2, 3 days back. We preliminarily we tried to assess it, but we have several doubts on that, the guidelines because the guidelines never spoke about what is the floor limit for that project. We have to calculate every small project also, whether it is INR 1 crore or INR 10 crore or INR 100 crore or INR 500 crores, that clarity is not there. Unless otherwise, we get those clarities from them, so it will be difficult to assess what is our impact on that.
But whatever the impact it is, even whatever the guidelines as it is implemented also, we are very much well prepared because you know that the last time when the risk weight is on the NBFC exposure has been increased or improved by the regulator, we are the first banker partly we are sharing with borrowers. This also it will continue whenever there is an improvement in these things. I suppose the provisioning norms are increased. We calculate our naturally part of that we share with our borrowers and the remaining things, we will absorb it. I don't see too much pressure on our bottom line or even on the capital side, madam.
Just what is your marginal cost of deposits, incremental cost of deposits?
Madam, incremental deposit to the term deposits, that is on an average, it is a 6.5% to 6.75% is there. But because the CASA is there, and the previous outstanding deposits at a lower rate. And average the cost of deposit last quarter, it is increased from 5.4% to 5.50%. Now it is a cost of deposit as on date it is 5.5%. But in the last quarter, you see that only 8 basis points has increased there, but yield on advances has increased from 8.6% to 8.71%. That means 11 basis points has increased. That's why we are able to show the 3.07% NIM as against our projection of 3.05%.
The next question we have from at Mona Khetan.
Just a few clarifications. So firstly, when I look at your CRAR balances, it was up 30% -- over 30% this quarter. So what exactly has driven this higher?
No, CRAR percentage is floating funds, madam. Whenever it comes for the floating points, you get that benefit, but we have taken some new schemes also in the CRAR. Actually 2 new schemes we introduced 6 months back. Those new schemes also have started earning that because we made it free of charge for every transaction in that, we have given several customer friendly. And we also introduced last year API banking for corporates. And we also introduced mobile app for the corporates. These are all some of our initiatives, both product side and the feature side and the platform side has helped us in giving that boost in the current account. But 1 or 2 institutional deposits and institutional accounts where we could canvas the state government or the central government accounts, there are also some float funds have come. That is the reason, but we are seeing the steady growth in the savings individuals.
Savings individuals for year-on-year basis, we have grown more than INR 17,000 crores. That has actually given the confidence that in the current year, we could achieve it -- we could easily achieve that 33% projected whatever we have projected. If you look at the fourth quarter of our CASA has improved from 31.65% to 32.21% or something 24. So that itself is around 63 basis points it has increased in the fourth quarter because the entire machinery, entire bank, we are focused on CASA by introducing new products, new platforms, new features and new initiatives to reach the new customers as well as the connecting -- reconnecting with the existing customers.
And this current year, also in the first working day, we have launched one Canara Angel that's targeting for the women customers and that is widely accepted by the public. And already in the 1 month, we got more than INR 200 crores deposit mobilization in only in the new accounts, not from the existing accounts. This tempo of introducing new products and the initiatives -- technology-related initiatives making the customer journeys more comfortable to them will continue madam so that our focus, we know that unless otherwise, we work hard on the CASA, it will have impact on our NIMs. That's why we are working more and more on CASA products and the CASA mobilization madam.
Got it. And secondly, on the operating expenses front. So what led to the sharp rise in other effects? And what sort of pension provisions have been made this quarter? And given that there was retrospective impact of wage hike this year, what sort of normalized employee expense we can expect in FY '25?
The staff cost, you know that as per the bipartite settlement that as last time also, we have provided INR 750 crores. During that time, I shared with you that another INR 150 crores to INR 200 crores towards the actuaries of the pension benefits we have to provide it. But when it comes for the actual calculation, it has come to the INR 350 crores, that INR 350 crores, entire INR 350 crores, in addition to that, whatever the increased incremental salary we have to pay, entire amount we have provided in this only.
The second one is that is the reason the staff cost has shown that, but ultimately, our staff cost will stabilize around INR 4,100 crores though, it is current INR 4,458 crores it is showing that. But next quarter onwards, our quarterly expenditure, what we are looking at is INR 4,000 crores to INR 4,100 crores. So to that extent, cushion is there in our books. The second one is other operating expenses also, whatever the onetime requirement is there, that around INR 200 crores, we have booked that expenditure also. And since when we are investing on the IT, naturally, the IT expenses also is slowly operating expenses are increasing that. But we are sure that we will maintain around 47% the CASA, whatever we could achieve that the cost-to-income ratio, we will try to maintain that at a little lower side at the 47%.
Got it. And just finally, what's the outstanding standard provisions on our books? And what is the PCR we hold against the restructured book?
Madam, restructured portfolio overseas when this comes for the RF1, RF2 and all, so total, our restructure has made -- during that time, it was INR 24,000 crores. But now as on date it is outstanding is only INR 17,000 crores. Out of that already INR 12,000 crores is standard asset and INR 4,800 crores slipped to NPA.
And what sort of provisions do we hold against the INR 12,000 crores of standard assets?
So whatever the stipulated regulatory stipulation is that we are maintaining it well above than that madam.
So say around 10% or thereabouts?
The regulatory requirement, whatever it is there that we are providing it.
Okay. And other than the general provisions of 40 bps, we may not be holding any other excess standard provisions. Is that a fair understanding?
No madam, wherever it is required, actually, even if it is not required in one big account, the last year, it has slipped to NPA. There not in anticipation of future ready, we have provided some INR 300 crores additional provision, which is not required as per regulatory, but we have provided the INR 300 crores.
Okay. But that was a slipped account.
Total actually additional provisioning what we have done is INR 1,800 crores madam.
This is INR 1,800 crores is the standard asset provisioning.
No, madam. Total regulatory requirement beyond that, that INR 1,800 crores what we have provided. That is for only future-ready balance sheet.
Okay. And this excludes the restructured book, the minimum requirements of restructured book?
Yes, madam. Everything whatever regulatory requirement, we are meeting that regulatory requirement. Beyond that also, we are over provisioning, we are making it. That is over provisioning is around INR 1,800 crores in the form of whether it is in the standard asset or restructured asset or NPA asset.
Got it, sir. And if I could just squeeze in one last question. So on the recoveries front. We have seen, when it comes to recovery from written-off accounts, we have seen very strong numbers at about INR 5,900 crores this year if I take the full year -- so -- and this constitutes a very large part of your overall profitability at around 40%. So what would be the guidance here on? What sort of -- because -- I mean the pool may be coming down, et cetera. So what will be the guidance on this front?
Madam, we have still written-off accounts, technically written-off accounts portfolio is there with us around INR 68,000 to INR 72,000 range. Still, there is a lot of scope to recover out of that. And every year, we expect that INR 4,000 crores to INR 5,000 crores we get from that bunch. And the fresh written-off also is keep on happening in that every quarter. And when you written -- write-off in the [indiscernible], there is every possibility that in that also there is a possibility to recover the amount. So this is an ongoing, it is not a onetime madam. Every year, we look at that INR 4,000 crores to INR 5,000 crores we can recover from the written-off accounts.
And the main where we can share it with you is our quality of the assets is mainly important. Look at that the 1 year back, we told that we have shared with all of you, that our recoveries and upgradation will be better than the slippages. That is the standard we have taken and the entire top management along with that staff members we are working on that. Continuously, every quarter, we are able to maintain that.
In the current quarter also, if you see that our slippages are from existing, it is INR 3,082 crores, the new fresh slippages, even existing add-on is INR 300 crores if you add total it's INR 3,400 crores slippages is there. As against that, the upgradations are INR 520 crores and cash recovery is INR 3,161 crores, total, it is INR 3,681 crores, INR 3,681 crores against the slippages are only INR 3,400 crores. So we are continuing in that.
And even when we are working hard on even existing SMA 0, 1, 2 there also, that gives the figures more comfortable for you that you just look at that 1 year back, our percentage of the SMA 0, 1, 2 is at 0.76%. In between, though, it has gone to the 0.80%. Now it has come down to the 0.69%. So we are working very hard on that number of accounts. If you see that both accounts and amounts, both at 0 level and 1 level and 2 level, we are working harder to control there itself. So that is helping us in maintaining our credit cost below the 1% and less pressure on our NIMs.
We move to the next question from Rakesh Kumar.
Sir, a couple of questions I have. So firstly, like we have a total gross NPA and written-off pool of 11.6% of total loan book. So what is the total unrealized interest income that we have on the book?
Unrecovered?
Unrecovered unrealized interest income on the gross NPA and the technical...
That is very difficult to calculate and tell. That our CFO, will share it to you, mail for entire exactly amount you have to calculate. But book balance, I can tell you that. So almost INR 1,10,000 crores to INR 1,20,000 crores it is available, including that gross NPA and the written-off book balance. But the written-off unapplied or waver interest -- so if you take it at a documented rate, it will be multifold. So -- but there is very limited possibility that you can earn out of that some amount. That's why generally we don't maintain that figure. It is individual account wise, it will be there. But when the negotiations happens, we also try to get not only the book balance, if at all, any part of that unrealized interest to be recovered, we keep recovering that.
But that is multifold, it will be there. So when I say it is INR 1,10,000 crores to INR 1,20,000 crores that will be definitely more than 100% of that amount.
So for this quarter, sir, this quarter, the interest income that we have accrued, what would be that number, sir, from NPA recovery and TW recovery?
That's what, sir, this recovery also this time also, again, we are targeting around TW, the book balance and all it is approximately, we are expecting around INR 1,500 crores to INR 1,600 crores we can recover. But these are all ultimately in a year we book around that INR 4,000 crores to INR 5,000 crores from technical written off. Some 1 quarter it may come down, 1 quarter it may go up based on that materialization of our negotiations. In the anxiety of achieving that things, sometimes we will not compromise on our -- when we can recover higher amount, we will try to recover the higher amount only even if it's 1 month delayed. That's why exactly telling in the particular quarter how much it is very difficult. But in an overall year, we definitely recovered in the technical written off around INR 4,000 crores to INR 5,000 crores, which we are already reflected in the last 1 or 2 years financial balance sheets.
Correct, sir. No sir, interest income part, sir, interest income part that we have accrued this quarter sir. How much that would -- that number would be?
See, again, interest income part also, it is based on your growth in the advances. Average growth in the advances. That is an interest income. Or interest on nonperforming assets you are expecting?
And sir...
You are expecting from me, interest on nonperforming assets?
Yes, sir, nonperforming asset and the technically written-off loan that we have recovered this quarter.
More or less that will be in every quarter, almost it is in the same lines, it will be there. But exact amount telling that, that's budgeting will not be there for that, whatever the best we can do, we will try to recover as much as possible.
Great. Great, sir. Sir, on the other OpEx, I would like to come to that number again. That number has gone up by around INR 600-odd crores this quarter. So what is the incremental number here in that other OpEx if you can share?
That particular -- see, what will happen when that particular quarter, it is in the technical written-off -- OpEx -- it's the OpEx, staff cost, you see that the first 1 is -- staff cost, 1 thing is operating expenses. The staff cost because of the bipartite settlement, we have to provide 17%, and we have completed that entire payment of arrears from November 2022 to now. And in addition to that, whatever it is required for towards pension and the gratuity that based on the recommendations given by the actuaries. And earlier, initially, we expected that it may be around INR 150 crores to INR 200 crores balance. But in actual, it has come INR 350 crores. That entire INR 350 crores also we have provided below the line.
So that's why your staff cost is reflecting that INR 4,458 crores. But on an average, every month, next quarter onwards, this staff cost will be stabilized around INR 4,000 crores to INR 4,100 crores. There is a question of INR 350 crores here in the operating expenses.
The second operating -- other operating expenses is in the depreciation one is there and onetime some expenditure in the IT-related also around INR 150 crores to INR 200 crores, we absorbed this time only. So those things are there. That's why that it is reflecting that a little more in the operating expenses. But otherwise, whatever our control in the operating expenses will continue and it will stabilize even other operating expenses around INR 2,600 crores. So for the INR 600 crores staff cost, there is INR 300 crores benefit will be there. In the down the level also, there will be some INR 300 crores cushion will be there when the coming quarters are coming. So that will be the INR 250 crores to INR 300 crores benefit will be there. So that will be the comfort for the next quarters, few quarters, whatever it is there.
Sir, just 1 last question, sir. Our non-retail term deposit...
Rakeshji, we would like you to please join back in the queue. Next question is from the line of Jai Mundhra.
Sir, in your opening remarks, you mentioned that you are still studying the RBI new circular on project under implementation. But out of your infra book, right? You would have an idea as to how much of the loans are under [indiscernible] as of now, maybe within the infra book of INR 1,29,000 crores.
See, there are several conditions are there in that. It's not the guidelines is only. So project under implementation is there. Project completed, but the balance has not come down below 20% is there. Balance projects are implemented the 20% has come down is that is also there. And we don't know to what is the floor price we have to take for project, whether it's project cost we have to take or the loan sanctioned has to be taken. So many doubts are there. These doubts, we are seeking the clarification from the regulator.
Exact amounts and tentative amounts, we can achieve it. Otherwise, now you have to -- in the absence of that, tomorrow, you may sanction 1 loan for MSME for INR 25 lakhs The INR 25 lakhs is a project implementation also, you have to provide. We don't know that exactly, no. So these clarifications, unless otherwise we get the clarifications, it's too early to comment on that. And -- but 1 thing I can give you confidence that whatever the guidelines given to the RBI, we are well prepared to face that. That much confidence I can give to you because partly whenever there is an impact on burden, either in the bottom line or in the capital side, the calculations, our risk department will calculate what is impact on that.
And that calculation partly we absorb, and partly, we request our borrowers to absorb it, and we are successful in convincing our borrowers even in the recently last time when the risk weightage and NBFCs have increased. That is the reason we could maintain our NIM at 3.07%, and we have shown a much improvement in the yield on advances in the fourth quarter. The same thing will continue. When you have a good relation with your borrowers and we can easily convince them to share the part of that. Even in existing borrowers also, we can request our borrowers to share that part of that burden. I don't see too much panicness in that. And you see that the last year, our net profit is INR 10,600 crores, but this time, our net profit is INR 14,554 crores. Don't you see that there is a 37% increment for us.
So we have ample cushion in our balance sheet. We are ready to face whatever it is there, the stringent guidelines. If it comes for the betterment of the balance sheet, we are in line with that regulator.
Understood. Understood. Okay. Sir, and on April 1, there was a new RBI regulation on reclassification of investment portfolio. You must have redrawn the balance sheet as on April 1. Was there any accretion to CET1 or AFS reserve or general reserve out of that exercise? And if you can quantify that?
I request my Executive Director, who is overseeing that Treasury, Mr. Mukherjee sir, he will share his views on that.
You see on implementation of the new accounting guidelines from first of April, it has added about INR 1,400 crores to our reserves. So that is a positive point, which has happened by implementation of this. Secondly, our HTM portfolio, which is quite high, more than 80%. So that is also giving us ample scope for future profitability because the yields are coming down. And even in the last financial year, let me tell you that our portfolio yield has increased from 6.69% to 6.91% for the total investment portfolio. So our Treasury, our investment portfolio is doing satisfactorily, I can say.
Point well taken sir, INR 1,400 crores is a decent amount. It's just that it is a combination of both AFS reserves and general reserves, right?
Right, Right, right, right. Right.
No, sir, just I wanted to check, is this the reevaluation of both HTM as well as AFS or only the AFS?
No, no. HTM and AFS.
And last one, if you can give the breakup of slippages during the quarter and the loan breakup. Slippages breakup and breakup of loans.
Slippage breakup. Yes, it's around INR 3,400 crores. Actually, out of that INR 1,000 crores, INR 1,100 crores 1,080 crores is agriculture, INR 1,200 crores is MSME, INR 400 crores is retail and INR 400 crores from mid corporate, it is there.
And breakup of loan book sir, by benchmark by EBLR, MCLR, fixed rate?
So that's -- the MCLR book is around 51-point odd, that is approximately 52%, sir. Our RLR linked is 38%. The remaining 10% is staff loans and loans against deposit and all those specific schemes sir.
If you permit, I can ask 1 more question.
Jai, we will request you to please join back in the queue.
The next question is from the line of Ashok Ajmera.
Sir, yes, definitely, sir, the profitability of the bank has improved and it is one of the best quarter as far the net profit is concerned. Having said that, sir, I have got, again, a question on our credit growth. Sir, if you look at this current quarter, I mean, the last quarter, the credit growth is -- net credit growth is only INR 6,717 crores in the domestic book, which is just 0.75%. So overall, you said you set a target of 10% and you achieved 11%. But going forward, how are we going to -- if in a quarter, the credit growth, and that is also in the March quarter itself, if it is only 0.75%. So how can we expect the credit growth to come in, in the coming quarter? So does it mean that a big chunk of loan has been repaid and a fresh loan..
Let me explain to you, sir. I was sharing with you for last 4 quarters that we have 2 years back invested INR 60,000 crores to INR 70,000 crores in triple A rated borrowers at a much, much cheaper rate. Because during that time, that decision was good because we have surplus INR 60,000 crores, INR 70,000 crores in our system, we deployed that. But now that deployment became a costly for us because that borrowers are not inclined to increase their rate of interest. And that rate -- at that rate, maintaining that INR 70,000 crores to just to manage our top line will be difficult and it will be having a stress on our margins.
So as a calculative business decision, the bank has taken a decision to gradually reduce our exposure from these 7, 8 borrowers from the INR 70,000 crores to acceptable level of INR 25,000 crores to INR 30,000 crores. That in overstretch, we cannot reduce it. Whenever -- whenever it comes for the due, renewal for those things are those things, we are reducing 50% or 60% or 30%, depending on the price what we are getting from the borrowers, and we are renewing it is partly. So the remaining amount we are accepting as a payment from them and that amount we are investing in that.
But the credit growth, there is no question of sluggishness. So I already shared with you in the last quarter itself. See, we are almost INR 14,000 crores to INR 15,000 crores we have taken reduced that limits from existing 3 AAA rated or whatever it is because the rate of interest is much, much below than the market rates. So that's why that is not reflecting in your Q-on-Q basis of the incremental growth. If that is the case, that would have been impacted our RAM growth. You look at that our RAM growth is more than 2%, then it is not that the credit growth is not there. So only because of the corporate growth, we have taken that decision and to reaching our portfolio without impacting our margins.
And where this INR 60,000 crores, INR 70,000 crores burden is there, that slowly we want to reduce that burden. This is the only that. And 1 more green patch, I will tell you to that, maybe this is the first of its kind. From April this month, 30th month, the March 31 to April 30, we are positive by INR 9,000 crores in the balance sheet. And that means in advances itself, we are positive by INR 3,000 crores to INR 4,000 crores. And that -- don't you think that it will give us benefit in the interest income?
Yes, definitely sir.
So we don't want to be in the market when the market is too busy and working for the top line. Our policy is very clear, sir. We don't want to grow at the top line at the cost of bottom line. We know when everybody is relaxed, we want to do that our job, that's job we are doing in the April itself. And in April, our balance sheet is so comfortable and first time in the history of our bank as well as in all the banks. We have INR 9,000 crores more than the -- our domestic business of March 31.
Yes, sir.
And the majority of this incremental growth has come from either in the savings bank or in the advances. Nothing else.
That's great, sir. Sir, you said that the additional provision over and above the IRAC norms is INR 1,800 crores. Sir, out of that 1 major account, which was slipped last year -- this year. How much out of that INR 1,800 crores is of that particular account?
Approximately INR 300 crores is there, sir.
Overall INR 300 crores because INR 300 crores you made this year.
No, no, overall. Additional, we have provided INR 300 crores.
Out of this INR 1,800 crores, which we have the floating -- I mean, the extra provision.
The extra provision, INR 300 crores extra provision we have made towards that account.
Point well taken. Sir, I will come on treasury, we have given a very good handsome...
Let him ask, Ashokji.
I have been waiting for a long time. People have asked 5, 6 questions.
Don't worry sir, ask, sir. Because you -- better from if any apprehensions are there, it is better to clarify.
No apprehension, sir, it is just a few points of information, data. And sir, our treasury has performed very well. The profit from the sale of the investment is INR 663 crores out of INR 865 crores of profit in this quarter. Now our AFS book is also increased by around INR 9,000 crores to INR 10,000 crores even in this quarter also. So Mukherjee saab, are you going forward, do this momentum in the treasury performance or income will continue in the coming quarters? Or do you see that rates also might be a little bit of softening may come by the RBI in the rates also?
No, no, definitely, sir. We are definitely for churning our portfolio in investments, and we have been trying to do that. And that is why, as I told you earlier, that our portfolio yields have increased to 6.91% from 6.69%. And also, please note that this change in accounting has given our CET1 a boost of 21 basis points, which is a very big amount, about INR 1,400 crores. So going forward, our AFS portfolio, we will continue to increase and churn it as well as use our HTM portfolio as well for churning and getting more and more profits. That is what our intention always and this time also.
If you permit just last question in this round. If you refer to Note #13, sir, you have sold some NP accounts, 12 NP accounts of INR 2,850 crores, that was the book value also and the outstanding also. So aggregate consideration received is INR 916 crores whereas in the next same note in the Note #10, 13E, we are mentioning that the quantum of excess provision reversed in the P&L account from the sale of the stretch loan is INR 371 crores. So the consideration received is INR 916 crores.
Let me explain to you, sir. Yes, whenever you are transferring your account, you're selling your account to NERCL or any other ARC. We have sold to only NERCL sir, no other ARC we have sold. The NERCL when you are selling it, the 15% only upfront you will get the cash sir. The remaining 85% they will give in the form of SRs, guaranteed by central government. Though it is guaranteed by central government, as for the existing regulatory guidelines, we cannot reverse that provisioning on that SR that portion. So whatever the settled amount, INR 968 crores upfront what we got is 15% of that cash, we will get it. The remaining accounts made whatever the SRs they are issuing it, that SRs provisioning against that amount will continue in the system, sir. That provision reversal, you don't see that.
We see only INR 371 crores in the provision reversal. And what was the percentage of this overall, including 15% and 85% of the book outstanding? I mean how much realization percentage?
Sir, it varies from account to account, sir. Some accounts we get to upfront cash more. Some account upfront cash will come less, but the minimum is upfront cash is 15%, but that varies from account to account.
The next question is from the line of Sushil Choksey.
Congratulations for very stable number and stable outlook. Sir, entire world is searching CASA and specifically Canara Bank, if we compare with our peer banks at our size level, what are we doing to make sure that our CASA that's the difference within our balance sheet and their balance sheet where cost-to-income or other numbers are concerned, presuming the other 2 numbers are stable, which are yet to be announced. What are we enabling that our CASA from current 32% goes to 35% or 40% over a period of 3, 4 years?
Sir, we are working hard on that CASA. Undoubtedly, we have taken CASA is our first priority among all our business parameters. But historically, when you say that the 62% to 65% of branches network is in the South India. CASA is historically is a challenge for our bank because that is -- though it is yielding in an asset side benefit, but this side is CASA. We don't want to accept that weakness as it is. And last year, first working day itself, we started -- we launched 6 products targeting various sectors. Retired people, we have come out with 2 products. And the salaried class, we have come out with 3, 4 products.
Then special other than salaried class for savings bank, we have come out with some select products. And business community also, we have come out with 2 products in the current account. We also simultaneously developed our digital footprint, so comfortable with the customer so that the younger generation with whom we feel that so much CASA is available, and they are the high earning individuals in the present society. So targeting them also, we are launching several features, several products so that they will start dealing with us.
And that has given us very much good comfortable. If you see our CASA as on December and CASA as in March. CASA as on December, it is only 31.662% Whereas if the CASA at March level, it has gone to the 63 basis points more, and we have crossed 32.25% or 32.26% something, that's the area. This is possible only because our incremental growth in the SB individuals. In the absolute numbers also, I can share approximately around INR 16,000 crores to INR 17,000 crores in SB individuals alone has been increased. Out of that, only INR 6,000 crores, we got it from through new schemes what we have introduced.
So that is actually the major chunk what we have got the jump. And simultaneously, we introduced relationship manager concept to reconnect with our high net worth customers that has been established almost 4,900 branches, exclusive officer has been given to handle or serve the top 200 customers. And we are introducing API banking with 200 features to make corporates comfortable with dealing from their host-to-host integrity. We also have done corporate mobile app. This is a second public sector bank to make it more comfortable for the corporate so that they can shift their entire ancillary business towards us.
And we are taking several initiatives to attract that. Recently in continuation of that with the motivation given by the last year whatever the new products, the enthusiasm has increased in our rank and file because so this first working day of this current financial year also, we launched 2 new products. One is directly CASA, that is Canara Angel targeting for the women. And this is the first of its kind in India. Whatever the products we are launching last 1 year and these 2 months, first of its kind in the industry, there afterwards other banks, whether it's a public or private sector banks are introducing the similar products.
And this Canara Angel has got so much attention from the various sections of the people, especially various geographical areas. And in the first 1 month itself, we got INR 200 crores in the new accounts opened in that particular product. It's not from the existing accounts migrated to that. So new connections, what we got through them that we got more than INR 200 crores in that. Simultaneously, we also launched to target the younger generation, whom we want to attract to onboard as a customer. So we introduced Canara Heal that is a medical GAAP funding.
So whenever the health insurance scheme has been taken by any youngster for their dependents or for themselves. When they admit their dependence on that, there will be a difference between the TPA settled amount as well as the corporate hospital billed amount. That gap of funding, the person can avail it within 2, 3 minutes by opting on the online. This is entire thing is in STP process. No physical intervention, everything, the documents can be uploaded online, and he can opt for that. That product also has attracted many corners from many areas and nowadays, I'm seeing more tractions as well as the discussions on that product. This product is aimed not for lending only. It is for aiming for that younger generation to onboard it. So they can onboard, they can open their account online, undertake this facility then and there and they can repay to whatever the installments they like it.
Such innovation R&D has developed a lot. And you know that very much that in the last January 1st itself, we introduced industry best business analytics and data lake in our special exclusive lab, and that is also creating wonders in garnering the leads, especially in the CASA side. So these are all the initiatives. We are not stopping here. We are also now having discussions with many vendors for bringing Gen AI into our regular customer experience areas so that, that also will attract the younger generation.
Our innovation in the technology to make more younger generation attractive to this bank will continue. And to attract other sections of the society, our R&D is target oriented, the sector augmented or segment targeted products we are launching it. And these efforts will continue. With that, we are very much confident that the current year, we will achieve that 33% CASA. And as you said that it is reaching to 37% to 38%. Definitely, it's a long way to go. We are working on that, but we are not sure whether we can achieve it in 3 years or 4 years, but we are aiming and we are working on that only.
Even recently when we had a Board strategy meet, we want to achieve it 35% by 2 years in the next 2 years. And there afterwards, again, we want to keep it in the longer 5-year plan also, we are drafted. There, we kept it after 5 years. We want to achieve it around 38%. These things are quite possible if we continue with that innovative products. And we are sure we will achieve those things, sir.
Sir, your city attracts the highest and the best talent and your state attracts the best talent on the service economy and new generation is concerned. The amount of digital spend, which we have done to migrate the bank from old Canara Bank to a new generation Canara Bank, when do you think this entire migration will reward the bank whether this year, next year or it will take some more time?
See, innovation and technology imparting is a journey sir, it is not a destination that we have -- we can say that, yes, we have achieved 100%. So always, you will get innovative things, and you have to capture that and you should be the first in the industry, then the people will attract you, people will recognize you, people will identify you as their preferred banker. But the majority of the investment, I can say that we are completed. But now we are in that taking the fruits out of that investment. So now we are working hard on that. But simultaneously, our investment may not be that much. Volumes may invest, but at a little lower side, but investment will continue in the IT. Now current year, we are targeted for Gen AI, artificial intelligence sir. New GEN AI, what is there that area, whether we want to improve our customer service, customer experience by introducing in the chat bot or even the customer call center or even in the online transaction monitoring to address the cybersecurity, cyber crimes and all those things. Many areas we identified, in that, we are working on that.
Sir, in the current year, we have already finished 1 month based on unavailed limits and what we have sanctioned and your credit guidance of 10%, 11% or you may do 12%, what is the limit available with people -- let's assume that the economy is on a very high trajectory after induction. What kind of limits can be availed, what are unavailed limits and drawn limits [indiscernible].
In the corporate itself, what we sanctioned and partly disbursed. We have approximately INR 25,000 crores to INR 30,000 crores in that in the HAM sector in the different, different areas. And even in MSME also, there are unavailed limits are there INR 4,000 crores to INR 5,000 crores. All these things, it's not that it will be overnight, they will use it. As and when they require, as and when it is due for that, they will use it. But what I want to tell you is the credit growth, I want to tell you, share it with you that from March 31, compared to the last working day of April after 1 month, so we are total balance sheet domestic business, we are INR 9,000 crores more than March figure.
This may be the first bank. We are openly sharing with you that we have INR 9,000 crores positive than the March 31 figure. That's what our business plan. And when the activity is less, we want to do more business, so that, that will take care of our NIMs also and written, yield-on advances also, interest income. In the first month itself, we are almost INR 4,000 crores positive in the advances.
Sir, my last question, this is around if time permits. Besides the 2 IPO, which you are proposing, any other asset monetization plan from Canara?
No, sir. At this moment, only those 2, we are thinking of listing sir. And it is in advanced stage. One is in advanced stage, one is in still half way. We expect that one it may come to the listing in the last quarter of this financial year. The other one may come in the first quarter of the next financial year, sir.
Because our CRAR is Sushilji, hope you will agree that this is one of the highest CRAR among the public sector peer. Public sector banks at 16.28% and our internal accruals are so high, and that is taking care of our growth rate, whatever it is there. At this moment, we are working on improving the value of our investment. Our focus more on improving our value of the investment. That is through subsidiaries are in that our bank.
The last 24 to 30 months, you've outperformed most of the peers in terms of the balance sheet size of many other aspects and shareholders have been rewarded. And I hope that journey continues.
Sure, sir, we can assure you that whatever the rewarding the shareholders last time, 120%, this time 160%, the same tempo will continue in the current year also, sir.
We have the next question from the line of Anand Dama.
Sir, my first question is on the margins. So this quarter, we have seen almost like stable margins as such. Was there any interest on NPA recovery during the current quarter? And what is your guidance in terms of margins for FY '25?
So NIM margins means NIM whatever we are telling presuming that current liquidity position continues -- so we are seeing in the bulk deposits and see this little softness from March quarter to now in the April. So the rates were earlier, it was too high, now it has come down something to extent of 7.6%, 7.7% that range. But still retail term deposits, the same rates are continuing, which is high cost deposit only.
So at this moment, we don't see too much change in the cost of deposit and the yield-on advances in the current quarter, too much change may not be there. So whatever the performance, what we are showing in the just concluded March may continue in the margins level. But for cautiously, we are projecting ourselves that it may be around 2.95% to 3%. But our endeavor always will be to see that it is our NIM is 3%, around 3% or more than 3%. But cautiously, we are giving the guidance that because presuming that this liquidity tightness will continue throughout the year. If the flexibility is there, automatically that will impact our NIM and that will show a positive reflection on that.
Sir, can you just talk about interest on NPA recovery during the current quarter, like fourth quarter, how much was it?
Interest on NPA?
NPA recovery.
So NPA recovery, interest specifically is telling that this much target and all it will be very difficult.
Fourth quarter, sir, I just want.
That's what, fourth quarter. Overall, whenever we recover towards the tranches. If it is a technical written-off -- written-off accounts. In that written-off accounts, whatever we are getting it, even book balance is a profit for us. And more than that, whatever we get it, we recover it. And whatever the existing levels of 4 quarters, it is there. So that INR 200 crores to INR 250 crores will continue every quarter. So that may not be a big change. You will see that 1 quarter you will get INR 600 crores, 1 quarter only INR 10 crores. On an average, generally interest on NPA will come around INR 200 crores to -- around INR 200 crores to INR 250 crores that will come in that.
Got it. Sure. And sir, 1 thing, basically, if you can just talk about what is the overall project financing exposure that we have on our book as of now in terms of percentage? I just want a ballpark, 10%, 20%.
I already addressed this question twice, but I don't mind repeating that. You tell me that what is the floor limit I have to take? Then I'll tell you.
Sir, all we are asking is basically any project financing exposure?
See, you are asking what is your exposure on the project finance? I'm asking you what is the floor limit, whether it is INR 10 lakhs, INR 1 crore.
You take it INR 1 crore.
So is it possible to calculate INR 1 crore above and all those things and readily share with you. MSME portfolio and all, let the clarity comes. At this moment, we expect that our exposures are in and around of INR 1 lakh crore if you take everything, but let the clarification comes. If the clarification comes that the project cost or the loan amount, the floor limit, if they say INR 1 crore, it is okay. If they say INR 10 crores, if they say INR 50 crores, that different figures will be there. But if you don't take any amount and 100% amounts you have to take, it will be around INR 1 lakh crores approximately.
The next question is from the line of Ashlesh.
Sir, just a couple of questions. Firstly, on the corporate loan book. Are there any further low-yielding corporate loans that you plan to shed? And what is the average yield on the corporate loan book right now?
See, corporate loan book, we don't shed it just like that shedding. So when we generally, whenever there is a due for that low cost or low yielding, low-yielding corporate book is there. I already sharing with you that we have INR 60,000 to INR 70,000 crores. Whenever those loans comes for either the repayment or for the renewal and all, we are negotiating with that parties. If that negotiation happens as per our expected level, if it is well within our appetite, we love to continue with them.
But suppose if that's -- they have better options from other banks, and they don't want to increase their rate of interest. In such cases, we are reducing our exposure. It is an ongoing exercise. But it's not that suddenly there will be a negative growth in that just like the last month, what it is there. It will not be there because already it is -- from March to now, we are seeing INR 3,000 crores incremental growth in the corporate book alone, in the 1 month.
Understood, sir. Sir, what is the average yield on the corporate loan book for us?
Now it has crossed to 8.05% sir. Earlier, it was now it was 7%, now it is 8.05% -- 8.17%, 8.17%. And we are comfortable anything about 8%.
Understood, sir. And what was this number in the previous quarter?
1 year back, it was only 7.02% or 7.06%, almost 110 basis points increase in that.
Understood. Sir, and just 1 last question. What would be the average cost of term -- outstanding term deposits for us?
See, average cost already, it's a cost of deposit, it is reflecting no, sir, it is 5.5%. If you want to exclusively term deposits, it may work out around 6.25% to 6.5% sir. If you don't add the CASA, the only the cost of the term deposits, it work around 6.25% to 6.5%.
We'll take that as the last question due to time constraints. Thank you, sir, for giving Antique Stock Broking Limited this opportunity. We'll hand it all to you for closing remarks.
Thank you. Thank you very much, sir. We'll continue to perform as expected lines. Our main thing is consistency. That consistency will continue. We will not see any knee jerks in our balance sheet in the coming quarters too. That much assurance I can give. Thank you, sir.
Thank you, everyone. That concludes the call.